Different types of sandpapers were used to grind surface of 304L alloy, and the effects of grinding treatment on surface properties and deformation microstructure were studied. Three dimensional profilometer, Vickers hardness tester, X-ray diffraction (XRD), scanning electron microscopy (SEM), focused ion beam (FIB), and transmission electron microscopy (TEM) were used to characterize the microstructure and mechanical properties. The results showed that with the increase of grinding particle size the surface roughness and hardness increased, while the absolute value of residual compressive stress decreased, however the grinding particle size had no effect on the average tension strength because the groove did not lead to the effect of notch stress concentration. After grinded by coarse sandpaper (No. 60), the surface metal deformed in the way of martensite shear from γ-austenite to α′-martensite, which conformed to K-S model, and surface nano-crystal layers with a thickness of about 2.3 μm, 1.5 μm and 0.6 μm were found at the groove peak, slope and valley, respectively. By comparison, after grinded by fine sandpaper (No. 2000), the nano-crystallization did not occur, and a high-density dislocation layer with a thickness of more than 1 μm was observed at the groove peak, slope and valley. • Hardness increase and compressive stress decrease with the increase of roughness. • Roughness had no effect on tension strength and notch stress concentration. • Surface metal deforms in the way of γto nano-α′ after grinded by No. 60 sandpaper. • Thickness of nano-α′ layer at groove peak, slope and valley decreases gradually. • Surface metal deforms as dislocation slip after grinded by No. 2000 sandpaper.